Regional Resource Adequacy Initiative Working Group Meeting: Maximum Import Capability, Import RA Resources, and Uniform Counting Rules July 20, 2016
Agenda Time (PST) Topic Presenter Kristina 10:00-10:10 1 Introduction Osborne 10:10-11:00 2 Maximum Import Capability (MIC) Chris Devon 11:00-11:20 3 PG&E views on MIC proposal PG&E 11:20-12:00 4 Internal RA Resource Substitution with External Resources Chris Devon 12:00-1:00 Lunch 1:00- 2:00 5 Discussion of Import Resources Qualifying for RA Chris Devon 2:00-3:55 6 Uniform Counting Rules Karl Meeusen Kristina 3:55-4:00 6 Next Steps Osborne Page 2
Maximum Import Capability Background Chris Devon Senior Infrastructure Policy Developer Page 3
Maximum Import Capability (MIC) background • MIC process already considers and protects existing contractual rights and pre-existing commitments • Will allow the ISO to protect existing arrangements and allow these practices to continue without impacting hose arrangements of potential new entrants • ISO will account for existing arrangements and practices that are established under firm transmission rights and contractual obligations • 13-step allocation process currently allows LSEs to nominate portions of their overall allocations on the interties on which they seek a specific allocation of import capability Page 4
MIC process – calculation and import allocations • “Import Deliverability” is assigned every year to LSEs: • Assignment of RA import capability to LSEs – MIC on each intertie is available to LSEs for procuring RA capacity from external resources; it is not assigned directly to external resources • Process for allocating MIC to LSEs – Steps 2-13 in Tariff Section 40.4.6.2.1, Available Import Capability Assignment Process • Annual determination of MIC – (Step 1) MIC values for each intertie will still be calculated annually for a one- year term Page 5
MIC calculation background • Historically Based - Select 4 hours by choosing 2 in each one of the last two years (and different days within the same year) with the highest total net import level when peak load was at least 90% of the annual system peak load - The average of net import schedules (0 MW is assigned when net imports are negative) + the average of unused ETC (adjusted for future year availability) technically should represent the Maximum Import Capability (MIC) for each tie - In order to assure that all pre-RA import commitments (already paid by ratepayers) are allowed to count for RA until they expire, an uplift is added to the above established methodology for certain branch groups and this higher number is published and divided among LSEs as MIC Page 6
Available Import Capability Assignment Process 13 Steps in Tariff Section 40.4.6.2.1 Step 1 Determine Maximum Import Capability (MIC) Total ETC Total ETC for non-ISO BAA Loads Step 2 Available Import Capability Total Import Capability to be shared Step 3 Existing Contract Import Capability (ETC inside loads) Step 4 Total Pre-RA Import Commitments & ETC Remaining Import Capability after Step 4 Step 5 Allocate Remaining Import Capability by Load Share Ratio Step 6 CAISO Posts Assigned and Unassigned Capability per Steps 1-5 Step 7 CAISO Notifies SCs of LSE Assignments Step 8 Transfer [Trading] of Import Capability among LSEs or Market Participants. Step 9 Initial SC Request to ISO to Assign Remaining Import Capability by Intertie. Step 10 CAISO Notifies SCs of LSE Assignments & Posts unassigned Available Import Capability Step 11 Secondary SC Request to ISO to Assign Remaining Import Capability by Intertie. Step 12 CAISO Notifies SCs of LSE Assignments & Posts unassigned Available Import Capability Step 13 SCs may submit Requests for Balance of Year Unassigned Available Import Capability Page 7
Maximum Import Capability Calculation Methodology Page 8
Proposed change to MIC calculation • Slight MIC calculation methodology adjustment is needed for use in limited circumstances – Reflects situations where new areas joining the ISO serves peak load conditions that normally occur during a non-simultaneous season compared to the rest of the system AND when there are no simultaneous constraints between those certain areas of an expanded ISO BAA • Current MIC methodology without this change would needlessly restrict downward the MW amount that can actually be reliably achieved for certain branch groups that are mainly used to serve the peak load in new areas that peak non-simultaneously Page 9
MIC calculation change would only be used in limited situations • Is only to be used when needed in order to avoid restricting the seasonal nature of the peaking timeframe that is used to set MIC values on each intertie – Winter peaking area would naturally observe highest import levels during the peak and would need that level of MIC in order to serve their individual peaking needs • Intended to capture truly maximum reliable MIC values where certain areas have different seasonal peaking characteristics and there are no associated simultaneous constraints between those different areas of the system – Allows for the ISO to capture additional benefits of load diversity across a larger geographic footprint Page 10
Maximum Import Capability Allocation Methodology Page 11
Modification to MIC allocation methodology • ISO has identified need to revisit MIC allocation methodology • ISO proposes to limit initial allocations of MIC capability to sub-regions of ISO that would be defined by the Regional TAC sub-regions • Allocations of MIC would be load ratio share basis for LSEs serving load within specified sub-regional areas • What does this mean? – Current BAA keeps its current MIC allocations – PacifiCorp system would keep all MIC capability created by its system and would be allocated by load ratio share of LSEs in that area only Page 12
Each sub-region would keep its capability in initial allocation of MIC • LSEs in the current BAA will still be receiving similar allocations of MIC capability that are made available by the current BAA interties today – Same current BAA LSEs would only be able to nominate MIC on those interties into the current BAA (sub-regional TAC area) • LSEs serving load within the PacifiCorp footprint will receive all of the MIC capability that is provided by PacifiCorp system’s capability – LSEs in that sub-region would only be able to nominate for additional MIC allocation only on interties into that PacifiCorp sub-region area Page 13
Split MIC allocations to each sub-region limits ability of LSEs to use MIC in other sub-regions • Proposal will still allow for LSEs to utilize MIC in other sub-regions of the ISO under Step 8 (Transfer of Import Capability) of MIC allocation process – Additional MIC in other sub-regions can still be bilaterally transferred between any LSE in any sub-region under this step • Under Step 13 (Requests for Balance of Year Unassigned Available Import Capability) of MIC allocation process all remaining MIC capability yet to be assigned would be open for nomination by all LSEs in all areas of the entire expanded ISO BAA Page 14
Proposal balances MIC allocation needs • Splitting of the initial allocations combined with the ability to bilaterally transfer MIC between the Regional TAC sub-regions and the final Step 13 ability to nominate any remaining MIC anywhere in the footprint will balance MIC allocation method needs • Maintains fair initial MIC allocations to sub-regions • Allows flexibility to allow all LSEs some ability to bring system RA imports to the system across any interties in an expanded BAA in order to realize the benefits of a larger geographic footprint Page 15
Both MIC calculation and allocation tweaks may need to be revisited in the future but are the best path now • Both proposals for adjustments to MIC calculation and allocation are intended to address the immediate needs of an expanded BAA as well as align with regional TAC proposals • ISO believes that it may be necessary to consider a more comprehensive MIC redesign in the future – A comprehensive MIC redesign could take over one year to complete a SH process and would not be feasible within the timeframe of this initiative Page 16
PG&E will present their views on MIC proposals Page 17
RA Unit Outage Substitution Rules for Internal and External Resources Chris Devon Senior Infrastructure Policy Developer Page 18
Tariff does not allow external resources to substitute for internal resources • Tariff currently requires that RA capacity from an internal system RA resource (internal non-local RA resource) that has experienced an outage requiring substitution be substituted with capacity from a different internal RA resource • Generally has been sufficient internal resources available for substitution when internal RA resources experience outage so this restriction has not caused any major concern previously • ISO believes that in the future this limitation could limit the pool of replacement resources for entities in an expanded BAA Page 19
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